–as authorities plan to make decision on available oil blocks by the third quarter of this year
AS Guyana continues to advance work in its oil and gas sector, Vice-President Bharrat Jagdeo has said that the establishment of a national oil company is still being considered, since a decision on the future of the remaining oil blocks is still to be made.
Speaking during Guyana’s flagship International Energy Conference and Expo at the Marriott Hotel, on Tuesday, Jagdeo said the idea is still active because several “large operators” have submitted expressions of interest to partner with the government on the establishment of a national oil company.
Any decision in this regard would be simultaneous with plans for the utilisation of Guyana’s available oil blocks.
The government in 2021, had disclosed plans to have the remaining blocks tendered in the third quarter of 2022.
According to Vice-President Jagdeo, the government is yet to make a decision on whether the blocks would be utilised for the establishment of a national oil company or tendered for independent oil and gas explorations.
As it is now, ExxonMobil is the operator of the Stabroek, Canje and Kaieteur Blocks offshore Guyana. Since 2015, the company has increased its estimated recoverable resource base in Guyana to more than 10 billion oil-equivalent barrels.
Further, CGX, together with Frontera Energy Corporation, operates the Corentyne and Demerara Blocks, and also has a share in the Berbice Block.
And already, Guyana has started to reap the benefits of its oil and gas, with direct earnings alone reaching more than US$620 million so far.
This is reportedly just the tip of the ice berg, as it was reported recently that ExxonMobil started production at Guyana’s second offshore oil development on the Stabroek Block, Liza Phase Two, bringing the total production capacity to more than 340,000 barrels per day in only seven years since the country’s first discovery.
According to a release, production at the Liza Unity Floating, Production, Storage and Offloading (FPSO) vessel is expected to reach its target of 220,000 barrels of oil later this year, as operations continue to be brought safely online.
The current resource has the potential to support up to 10 projects. ExxonMobil anticipates that four FPSOs with a capacity of more than 800,000 barrels per day will be in operation on the Stabroek Block by year-end 2025.
Payara, the third project in the Stabroek Block, is expected to produce approximately 220,000 barrels of oil per day, using the Prosperity FPSO vessel, which is currently under construction.
The field development plan and application for environmental authorisation for the Yellowtail project, the fourth project in the block, have been submitted for government and regulatory approval.
Timely development of these additional projects, and continued exploration success offshore will enable the steady advancement of Guyanese capabilities and enhanced economic growth.
Vice-President Jagdeo repeated again on Tuesday that the government supports accelerated exploration, noting that it is against this backdrop that the government is considering tendering the oil blocks to locals.
The senior government official said oil blocks were previously awarded on a first come first serve basis, but that policy has since been amended to ensure that a broader range of persons have the opportunity to bid and win those blocks.
“We’ve made it clear that we will either go to an auction by the third quarter of this year, with or without seismic done on our part… that decision still has to be made in government… or alternately use those blocks to form a national oil company, because we had had some proposals from some large operators to work with the government in a national oil company,” Vice-President Jagdeo said.
He related that one of the major concerns of the government as it regards oil blocks, is investor protection. To this end, the said the government intends to put in place policies that ensure investors get a return that merits the risks associated with oil and gas production.
President Dr. Irfaan Ali had said in early 2021, that when the government is ready to award new oil blocks, the process will be done transparently to ensure that Guyana gets the best deal.
“We have made it very clear that the process in awarding new oil blocks will be very much different. It will be an open, public process and when we get to that stage it will be a public, open bidding process. We will be looking for the best offer in an open public bid,” President Ali said.